Visa Int'l v. JSL
Citation Visa Int'l Serv. Assoc. v. JSL Corp., 2002 U.S. Dist. LEXIS 24779 (D. Nev. Oct. 22, 2002), vacated, 90 Fed. Appx. 484, 2003 WL 23018942 (9th Cir. 2003), on remand, 533 F.Supp.2d 1089 (D. Nev. 2007) (full-text); granted plaintiff’s motion for relief from judgment, 590 F.Supp.2d 1306 (D. Nev. 2008) (full-text), aff'd, No. 08-15206 (9th Cir. June 28, 2010). Factual Background Plaintiff Visa International Service Association (“Visa”), the international financial-services company that owns the trademark VISA for credit-card services, sued defendant regarding its registration and use of the domain name "evisa.com" and the mark "evisa" in connection with an English-language school in Japan. Defendant named the school "Eikaiwa Visa" — "Eikaiwa" means English conversation in Japanese and defendant selected "Visa" because it wanted a name that suggested "world travel" among other things. Defendant initially registered the domain name "evisa-jp.com" and later registered "evisa.com" in August 1997. Defendant began referring to its language school as eVisa sometime in 1997. In August 1999, Visa hired a third party to contact defendant to attempt to purchase the "evisa.com" domain name. At that time, defendant did not post any content on the "evisa.com" website. Visa's agent offered $10,000 and then $50,000 for the domain name, and defendant eventually countered at $250,000. Defendant filed a trademark application for the mark eVisa in October 1999, and in February 2001 filed oppositions to Visa's trademark applications for eVisa, e-Visa, and e Visa. Before this suit was filed, defendant stated on its website that it also offered online payment and credit-card processing services. Trial Court Proceedings In an earlier decision, the court denied Visa's motion for preliminary injunction. Although it held that Visa was likely to succeed on the merits of its trademark-dilution claim, Visa failed to show irreparable harm. Visa later moved for summary judgment on its dilution claim, defendant filed motions for summary judgment on Visa's infringement and cybersquatting claims, and Visa filed a cross-motion for summary judgment on its cybersquatting claim. In granting Visa's motion for summary judgment on its dilution claim, the court held that defendant's use of the mark eVisa and the domain name "evisa.com" was likely to dilute, or has diluted by blurring, Visa's famous VISA mark. Because "e" is a commonly used prefix to identify the online version of a business, defendant's "evisa.com" domain name "presented a serious impediment to customers trying to locate the Visa web site." Moreover, allowing defendant to use the domain name "would put Plaintiff's name and reputation at the mercy of Defendant." To remedy this dilution, the court enjoined defendant from using or registering the eVisa mark and from using the domain name "evisa.com." It also ordered defendant to deactivate the “evisa.com” website. But the court did not order defendant to transfer the domain name to Visa. The court denied the parties' cross-motions for summary judgment on the cybersquatting claim, finding a genuine issue of material fact whether defendant had a reasonable belief that its actions were unlawful. The court also denied defendant's motion for summary judgment on Visa’s trademark infringement claim based on its rights to the mark “e-Visa,” finding a genuine issue of material fact on whether Visa has used the mark "e-visa" in commerce. Appellate Court Proceedings In an unpublished opinion, the Ninth Circuit vacated the district court’s injunction barring defendant’s use or registration of “e-Visa” or the domain name “evisa.com” based on Visa’s dilution claim. Because the Supreme Court decided Moseley v. V Secret Catalogue, Inc., which required that a Visa establish actual dilution rather than a likelihood of confusion, after the district court ruled, the court of appeals remanded the case to the district court for reconsideration of Visa’s dilution claim. Trial Court Proceedings on Remand After the Ninth Circuit remanded the case to the district court, the Trademark Dilution Revision Act of 2006 ("TDRA") was enacted, which adopted the “likely dilution” test. On remand, the district court initially rejected Visa’s argument that under the law-of-the-case doctrine, because Congress returned the dilution test to the pre-Moseley standard of likely dilution also found in the TDRA, and the district court had previously found for Visa under this standard, that it should again grant summary judgment in its favor. This argument, however, was “foreclosed” by the Ninth Circuit’s holding in Jada Toys that the pre-TDRA dilution standard, as interpreted by Moseley, would apply to cases filed prior to the enactment of the TDRA, which was the case here. Under Moseley, a plaintiff must produce evidence of actual dilution more than “the mere fact that consumers mentally associated the junior user’s mark with a famous mark . . . must reduce the capacity of a famous mark to identify the goods of its owner.” In suggesting how a plaintiff may show actual dilution, the U.S. Supreme Court suggested that “direct evidence of dilution such as consumer surveys will not be necessary if actual dilution can reliably be proved through circumstantial evidence — the obvious case is one where the junior and senior marks are identical.” In applying this standard here, the district court held again that summary judgment was appropriate for Visa. Because it had previously held that defendant’s use of Visa’s mark “had diluted the plaintiff’s ability to identify and distinguish its goods and services,” it met ‘’Moseley’’’s higher standard of actual dilution. Defendant’s addition of the “e” to VISA, which was a common way to denote an online version of a business, “presented a serious impediment to customers trying to locate the Visa web site” and weakened Visa’s ability to identify its goods and services. Thus, the court found that it had indeed found that Visa had shown actual dilution in the previous case, and precluded that issue as a matter of law. Further, because ‘’Moseley’’ did not change the standards for the other three elements of dilution — that the plaintiff’s mark was famous, that defendant made commercial use of the mark, and that defendant’s use began after plaintiff’s mark became famous — those elements were subject to the law-of-the-case doctrine unless the first decision was clearly erroneous, there was an intervening change in the law, the evidence on remand was sufficiently different, there were other changed circumstances, or a manifest injustice would result. In reviewing these three elements, the court found that only one, whether plaintiff’s mark was famous, fit into an exception to the law-of-the-case doctrine, because the evidence on remand regarding that element was sufficiently different. Thus, the court reexamined whether Visa’s mark was famous. After reviewing the eight FTDA fame factors, it held that Visa’s mark was highly distinctive and famous based on its highly successful and long-term use, the third-party Internet usage of the term “visa” was non-commercial and thus not as a trademark, and highly favorable consumer survey evidence. Having found for Visa on all four dilution elements, the court granted Visa’s motion for summary judgment on its dilution claim and against defendant’s trademark infringement counterclaim. The court also enjoined defendant from using or registering the EVISA mark and using the “evisa.com” domain name. It also ordered defendant to “deactivate” the website at “evisa.com.” Second Appellate Court Proceedings Following the district court’s second grant of summary judgment for Visa, the Ninth Circuit reversed its prior ruling in ‘’Jada Toys’’ and applied the TDRA even though that case was filed before the TDRA’s enactment. Based on that decision, Visa filed a motion for relief from the district court’s final judgment based on the court’s “mistake” in applying the FTDA instead of the TDRA. Pursuant to the district court’s request, the Ninth Circuit remanded the case back to the district court to consider Visa’s motion. Trial Court Proceedings After Second Remand Applying the TDRA, the district court granted Visa’s motion, finding that Visa met its burden of proof of showing that defendant’s use of “evisa” as both a domain name and as a mark on its website created a likelihood of dilution with Visa’s VISA mark. First, the court found that the VISA mark was famous on a nationwide scale based on evidence of the mark’s length of use (the mark was widely advertised in various media for 25+ years), the duration, extent, and geographic reach of advertising and publicity under the mark (more than $1 billion spent on advertising in the U.S. from 1997-2000 alone), the extent of sales under the mark ($1.3 trillion in sales in 2006 alone and the VISA card was accepted at more than 6.3 million U.S. locations), consumer survey results (survey evidence showed a 99% level of aided recognition of the VISA mark and an 85% level of unaided recognition), and the mark’s federal registration status (Visa owned 66 registrations for VISA-formative marks). The court also found that the VISA mark was arbitrary for financial and banking services and thus was inherently distinctive. Second, the court held that defendant made commercial use of the VISA mark. The Ninth Circuit previously held in ‘’Thane Int'l, Inc. v. Trek Bicycle Corp.’’ that “the mark used by the alleged diluter must be identical, or nearly identical, to the protected mark.” Moreover, in ‘’Jada Toys II,’’ the Ninth Circuit stated that to be nearly identical, two marks “must be similar enough that a significant segment of the target group of customers sees the two marks as essentially the same.” Here, the district court reiterated its earlier finding that the only difference between the two marks was defendant’s addition of the letter “e” as a prefix, which was “commonly used to denote the online version of a business.” Third, the court held that defendant commenced use of its mark after the VISA mark had become famous. Fourth, applying the TDRA’s six nonexclusive factors set forth in Section 1125©(2)(B), the court held that defendant’s use of the EVISA mark and evisa.com domain name was likely to cause dilution by blurring the distinctiveness of the VISA mark. Regarding the degree-of-similarity factor, defendant argued that its EVISA mark was “easily and immediately distinguishable” from the VISA mark both “visually and intellectually” based on “the context on which the two marks actually appear.” Defendant also argued that “when EVISA is taken in the context of the website, that mark is remarkably dissimilar from the VISA mark.” The court disagreed, however, pointing out that defendant’s use of the EVISA mark was not limited to the content of its website. Rather, because defendant also used the EVISA mark as the domain name for its website, defendant “used the VISA mark in a setting where context-specific factors, such as the appearance of defendant’s homepage, are largely irrelevant.” Accordingly, in the context of a domain name, the court found that the VISA and EVISA marks were “very similar.” The remaining blurring factors also favored VISA or were neutral. The VISA mark was arbitrary and had a “moderately high” level of inherent distinctiveness. As to whether Visa engaged in substantially exclusive use of the VISA mark, although defendant failed to present any evidence of third-party use of VISA as a trademark, the court noted that it was Visa’s burden to show the absence of a genuine issue of material fact. The court thus deemed this factor neutral. The VISA mark also carried a “very high degree of recognition” with the general public based on the consumer survey evidence noted above. However, there was no evidence that defendant intended to create an association with the famous VISA mark. The court pointed to defendant’s submission of evidence that its owner selected the EVISA mark as a contraction of the words “Eikaiwa Visa,” the name of defendant’s language school, and that he selected “Eikaiwa Visa” because “Eikaiwa” is the Japanese word for English and the word “visa” connoted “the ability to travel, both linguistically and physically, through the English-speaking world.” This factor thus weighed against a finding of blurring. Regarding the factor of whether there is “any actual association” between the EVISA and VISA marks, Visa submitted a survey showing that 73% of survey respondents “mentioned VISA when asked whether EVISA reminded them of another brand name.” Defendant argued that this survey was inadmissible because it “completely removed the context within which the survey responder could relate the image to anything and was specifically not reproduced in the context of how they would have come to the page reflecting the ‘evisa’ image” and it was “presented only to business owners, and not to consumers, which is not comparable to the relevant population-defendant’s consumer/customers.” The court rejected these arguments because the survey did present the EVISA mark in the context of defendant’s website as it appeared shortly before Visa filed this lawsuit in 2001, and defendant in discovery stated that its customers, with one exception, were businesses. The court also discussed a prior Ninth Circuit dilution case decided under the FTDA, ‘’Panavision v. Toeppen|Panavision]],’’ in which the court held that the defendant’s use of the domain name panavision.com diluted the plaintiff’s PANAVISION mark because a “significant purpose of a domain name is to identify the entity that owns the website.” The court found Panavision’s reasoning “still persuasive” here to defendant’s EVISA mark, especially given the common use of the letter “e” to denote the online version of a business. In sum, the four blurring factors that favored Visa constituted “an exceptionally strong showing” that supported the conclusion that the EVISA mark was likely to cause blurring of the VISA mark as a matter of law. In doing so, the court noted that the degree to which consumers actually associated the EVISA and VISA marks was a more important factor than defendant’s intent to create such an association. It also held that Visa’s failure to submit any evidence regarding the extent to which it was engaged in substantially exclusive use of the VISA mark was not fatal, noting that the blurring factors were “discretionary and nonexclusive” and “the inherent difficulty of proving the nonexistence of a fact, that is, that there are not others using the VISA mark.” The court thus enjoined defendant from using or registering the EVISA mark and from using the evisa.com domain name. Third Appellate Court Proceedings Under federal anti-dilution law, a plaintiff must show that its mark is famous and distinctive, that the defendant began using its mark in commerce after plaintiff’s mark become famous and distinctive, and that defendant’s mark is likely to dilute plaintiff’s mark.See Jada Toys, Inc. v. Mattel, Inc., 518 F.3d 628, 634 (9th Cir. 2008). While Defendant did not dispute that Visa has a famous mark, or that its own mark was used after Plaintiff’s mark attained famous status, Defendant contended that eVisa was not likely to dilute the Visa mark. The court focused its discussion of dilution on “blurring,” which occurs when a mark previously associated with one product also becomes associated with a second. This secondary association weakens the first mark's ability to evoke the first mark owner in the minds of consumers. A court may grant summary judgment on the issue of dilution if no reasonable fact-finder could fail to find a likelihood of dilution. The marks in question are effectively identical and the use of an identical mark provides “circumstantial evidence” of dilution. The prefix “e” commonly refers to the electronic or online version of a brand and does no more to distinguish two marks than would the use of “Corp.” or “Inc.”''See'' Horphag Research Ltd. v. Garcia, 475 F.3d 1029, 1036 (9th Cir. 2002)(full-text). Not only did Visa sufficiently establish that it is a strong mark, it offered uncontroverted evidence that Visa is the world’s top brand in financial services. Visa presented additional market research evidence to show that eVisa diluted the Visa mark. Defendant attempted to persuade the appellate court to reverse the summary judgment, pointing out that “visa” is also a word with a common dictionary definition. When a trademark is also a word with a dictionary definition it may be difficult to establish the distinctiveness required for dilution. The Visa mark, however, does not use the literal definition but instead draws on positive mental associations with travel visas, which make potentially difficult transactions relatively simple. “The significant factor is not whether the word itself is common, but whether the way the word is used in a particular context is unique enough to warrant trademark protection.”Wynn Oil Co. v. Thomas, 839 F.3d 1183, 1190 n.4 (6th Cir. 1988)(full-text). Ultimately both companies use the word “visa” in ways other than the ordinary dictionary definition, and to evoke similar connotations of the word. As a result, “eVisa” stands to dilute the Visa mark and the summary judgment in favor of Visa was affirmed. References Source * This page uses content from Finnegan’s Internet Trademark Case Summaries. This entry is available under the Creative Commons Attribution-Share Alike License 3.0 (Unported) (CC-BY-SA). Category:Case Category:Case-U.S.-Federal Category:Case-U.S.-Domain name Category:Case-U.S.-Dilution Category:Domain name Category:Dilution Category:2010